This project paper concerns to provide additional financing to the Republic of Chile for the scaling-up of the Social Protection Technical Assistance Project. The additional financing will help finance the costs associated with the scale-up of the project’s impact and development effectiveness. The additional activities to be financed are related to the further strengthening of the system of social protection in Chile through: (1) the continued operation and improvements in Chile Solidario, designed to support extremely poor families and other vulnerable individuals (including to date older adults living alone, the homeless, and children of prisoners); and (2) the recent extension of the system to cover young children through Chile Crece Contigo (integrated system of protection for young children).
This paper evaluates small and medium enterprise (SME) support programs in Chile using a firm-level panel for the 1992-2006 period on two groups of firms ? a treatment group that participated in SME programs and a control group that did not. These unique panel data provide an unprecedented opportunity to address several issues that have plagued impact evaluations of SME programs ? selectivity bias from observed and unobserved firm heterogeneity, identification of an appropriate control group, and inability to track firms over a long enough period of time for performance outcomes to be realized. Using difference-in-differences models combined with propensity score matching methods, the paper finds evidence that participation in SME programs in Chile is associated with improvements in intermediate outcomes (training, adoption of new technology and organizational practices), and causally with positive and statistically significant impacts on sales, production, labor productivity, wages and exports. The mixed results of previous studies may be attributable in part to the confounding effects of unobserved heterogeneity motivating selection into programs of firms with relatively low productivity levels, and in part to time-effects of program participation occurring in years after the time horizon of most impact evaluation studies.
This project paper introduces changes in the Chile, Santiago Urban Transport Technical Assistance Project and makes corresponding amendments to the project’s legal documents. The changes are needed in order to better align Bank assistance with the operational and financial challenges of the new public transport system in Santiago. The expected outcomes from the restructured project will mainly consist of improvements in the quality and/or efficiency of public transport in Santiago as well as to Transantiago’s financial/fare management system. The project development objective as stated in the loan agreement, namely to ’support the Borrower in achieving an efficient and sustainable urban transport system for Metropolitan Santiago’, will be on track to be achieved.
Emerging economies have tried to promote long-term debt because it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-term instruments. The authors analyze monthly asset-level portfolios of Chilean institutional investors (mutual funds, pension funds, and insurance companies) and compare their maturity structure to that of US bond mutual funds. Despite being thought to invest long term, Chilean asset-management institutions (mutual and pension funds) hold large amounts of short-term assets relative to US mutual funds and Chilean insurance companies. Short-termism is not driven by lack of instrument availability or tactical behavior. Instead, it seems to be explained by the desire to minimize inflation risk and, more importantly, by manager incentives that tilt demand toward short-term instruments. Extending the maturity of emerging market debt may require reducing risk and reshaping investor incentives.
Ratings for the Santiago Urban Transport Programmatic Development Policy Loan Project for Chile were as follows: outcomes were moderately satisfactory, the risk to development outcome was moderate, the Bank performance was moderately satisfactory, and the Borrower performance was also moderately satisfactory. Some lessons learned included: lack of a holistic approach may result in emphasizing one concern over another, for example, focusing mainly on environmental and economic considerations may lead to a design with unnecessarily fewer and larger buses. However, fewer and larger buses reduce comfort and increase waiting times. Such a decrease in service quality is a disincentive for public transport use and will, at least in the long run, go against environmental and economic considerations. Hence, it is important that a design that includes user participation finds the right balance between environmental and economic considerations and service quality. Travel and network models are excellent tools to evaluate network designs, but over reliance on normative analytical tools that ‘optimize’ a network subject to a set of assumptions, especially in areas that assume behavioral changes, should be avoided. The modeling exercise also needs to include ‘bottom up’ inputs, such as information on the importance in terms of overall weight people give to transfers, waiting, and walking. The Santiago experience showed that it is not advisable to redesign the public transport network without considering the existing information on travel demand and destination available through the operators. Additionally, stakeholders’ involvement in the network design process, especially the municipalities comprising the metropolitan area, operators and users, is essential, and the design concept for the network needs to be extensively modeled before implementation.
Ratings for the Institutional Strengthening of the Ministry of Public Works (MOPW) Development Policy Loan Project for Chile were as follows: outcomes were satisfactory, the risk to development outcome was moderate, the Bank performance was satisfactory, and the Borrower performance was also satisfactory. Some lessons learned included: the reform objectives were defined by the MOPW in close and extensive consultations with stakeholders internal and external to the MOPW. The World Bank has supported this participative approach and has encouraged the continuous monitoring and evaluation of the reform’s analytical underpinnings. At the implementation stage, the MOPW leadership has strengthened the initiatives aimed at guaranteeing the continuous support of stakeholders. To this end, the change management component turned out to be critical to expand support for the reform. MOPW leadership also decided to increase training, capacity building, and technical support activities to facilitate the implementation of the reform. In addition, the project components, supported by the MOPW human resources department, have established ad-hoc committees, which serve as platforms for consulting with the MOPW unions. The Bank team highlighted during supervision missions the need to involve non-managerial personnel within the MOPW in Santiago and in the regions to increase understanding of the objectives pursued by the reform and to increase overall support. More stability of the Project Implementation Unit (PIU) coordinator office will enhance the synergies between the project components and leverage the policy dialogue with the Bank. This dialogue has been fruitful on climate change issues and can further be extended to other issues such as Public Private Partnerships (PPPs), renewable energy concessions, and energy efficiency. The stability of the PIU office will also improve the effectiveness of the change management component that is anchored in the PIU. It will as well enhance the procurement pipeline flow.
Many recent models have been developed to fit the basic facts on establishment and industry evolution. While these models yield a simple interpretation of the basic features of the data, they are too stylized to confront the micro-level data in a more formal quantitative analysis. In this paper, the author develops a model in which establishments grow by innovating new products. By introducing heterogeneity to a stylized industry evolution model, the analysis succeeds in explaining several features of the data, such as the thick right tail of the size distribution and the relations between age, size, and the hazard rate of exit, which had eluded existing models. In the model, heterogeneity in producer behavior arises through a combination of exogenous efficiency differences and accumulated innovations resulting from past endogenous research and development investments. Integrating these forces allows the model to perform well quantitatively in fitting data on Chilean manufacturers. The counterfactual experiments show how producers respond to research and development subsidies and more competitive market environments.
